California Trucking Association the latest to sue state over driver classification ruling

Updated Nov 14, 2019

The California Trucking Association and two owner-operators are suing California over the state’s enforcement of its recently adopted test to determine whether a driver is an employee or an independent contractor. The so-called ABC test sets a steep standard for classifying drivers as independent contractors and could threaten the use of owner-operators in California.

The Oct. 25 lawsuit seeks declaratory and injunctive relief in San Diego’s federal district court against the test, which places the burden on the employer to prove a worker is a contractor and not an employee. In April, the California Supreme Court applied the measure, the so-called ABC test, in Dynamex Operations West, Inc. v. Superior Court, for classifying employment under the state’s wage order for transportation workers.

That unanimous ruling departed from the multi-factor or economic realities test the state had used for truckers since 1989. Classification as an independent contractor now requires that a worker satisfy the three-prong test, including that his services are outside the usual course of business of the hiring company.

The Western States Trucking Association has also filed a lawsuit against the ruling. In July, WSTA sued California’s Department of Industrial Relations and the state’s attorney general, seeking to nullify the ruling. WSTA’s Joe Rajkovacz says the ruling “effectively eliminates the use of owner-operators” in the state.

Owner-operator plaintiffs Thomas Odom of Madera and Ravinder Singh of Freemont contend the Dynamex decision prevents independents from contracting their services to carriers. It requires motor carriers to extend full benefits to all drivers, including owner-operators, such as overtime, meal and rest breaks.

Motor carriers say fluctuating demand for highly varied services makes it impractical to not contract with owner-operators.

They argue the Dynamex conflicts with 1994’s Federal Aviation Administration Authorization Act, which states that federal law supersedes states and municipalities from applying their own regulations to “price, route, or service of any motor carrier.” It also adds an “impermissible burden on interstate commerce” under the federal commerce clause.